This form is a type of asset-financing arrangement in which a company uses its receivables (money owed by customers) as collateral in a financing agreement. The company receives an amount that is equal to a reduced value of the receivables pledged. The age of the receivables have a large effect on the amount a company will receive. The older the receivables, the less the company can expect.
This type of financing helps companies free up capital that is stuck in accounts receivables. Accounts receivable financing transfers the default risk associated with the accounts receivables to the financing company. This transfer of risk can help the company using the financing to shift focus from trying to collect receivables to current business activities.
This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
A Louisiana Financing Agreement is a legal document that outlines the terms and conditions between a dealer and a credit corporation for wholesale financing with a security interest in accounts and general intangibles. This agreement is crucial to protect the rights and interests of both parties involved in the financing agreement. The primary purpose of the Louisiana Financing Agreement is to provide the credit corporation with security for the money they lend to the dealer. It ensures that the credit corporation has a right to recover their funds in case of default or non-payment by the dealer. The agreement specifies the types of accounts and general intangibles that are included in the security interest. Accounts refer to the dealer's receivables from customers, whereas general intangibles encompass various intangible assets such as patents, trademarks, copyrights, and licenses. By including these assets in the security interest, the credit corporation can have a claim on them if the dealer fails to fulfill their financial obligations. There can be different types of financing agreements between a dealer and credit corporation in Louisiana, depending on the specific needs and circumstances of the parties involved. Some common variations include: 1. Retail Financing Agreement: This type of agreement is used when a dealer requires financing for retail sales to individual customers. It outlines the terms for financing individual transactions made by the dealer with the end consumers. 2. Floor Plan Financing Agreement: Floor plan financing is predominantly used in the automobile industry. This agreement provides financing to the dealer to purchase inventory, securing the credit corporation's interest in the vehicles as collateral until they are sold to customers. 3. Inventory Financing Agreement: Similar to the floor plan financing agreement, this type of financing agreement provides funds to the dealer specifically for purchasing and maintaining inventory. The dealer's accounts and general intangibles related to the inventory serve as security for the credit corporation. 4. Equipment Financing Agreement: This agreement focuses on providing financing for specific equipment purchases made by the dealer. The credit corporation secures its interest in the equipment and related accounts and general intangibles. In summary, a Louisiana Financing Agreement outlines the terms and conditions of wholesale financing between a dealer and a credit corporation. It establishes a security interest in accounts and general intangibles to protect the credit corporation's investment. Different types of financing agreements, such as retail, floor plan, inventory, and equipment financing agreements, cater to specific financing needs and assets involved in the transaction.
